Limited community of property

Are you getting married soon? You can get married on different terms. If you do not arrange anything, you will marry in limited community of property by default. Find out exactly what this means for your business.

By default, you marry in limited community of property (in Dutch), unless you draw up prenuptial agreements beforehand. This has been the case since the renewal of matrimonial property law in 2018. This also applies to entering into a registered partnership. Everything you read here about marrying in limited community of property also applies to the registered partnership. Getting married affects your business.

• Limited community of property
• Conditions of marriage
• Reasonable compensation
• Advice

Limited community of property

Within the limited community of property, you and your partner share everything you build up from your wedding day: your possessions, income and debts. This applies to anyone who marries from 1 January 2018 and does not draw up a prenuptial agreement (in Dutch). Did you get married before 1 January 2018? Then nothing will change for your situation.

Different assets

If you are married in limited community of property, there are three assets:

• your own private assets
• your spouse's private assets
• the common assets

All income, assets and debts you receive or incur during the marriage are common. In other words, you share these with your husband or wife. This also applies to assets and debts you already had jointly before the marriage. However, assets and debts that were private before your marriage, i.e. belonged to you alone, also remain private during the marriage.

Consequences for your business

Marrying in limited community of property affects your business.

• Did you already have your business before you got married? Then your business does not fall into the limited community of property. Only you own proceeds and any debts of your business.
• Do you start your business during the marriage? Then your company and all its proceeds and debts do belong to the limited community of property. You then share them with your partner.
• Gifts and inheritances received before or during the marriage are part of your private assets.

If you cannot prove that something belongs to you, the law states that it must be shared.

Risks

There are disadvantages and risks for entrepreneurs in marrying without a prenuptial agreement. For example, it may be unclear what belongs to whom and how the income and/or value of your business should be shared between you and your partner if you get divorced (in Dutch), one of you dies or the business goes bankrupt.

Agreeing what belongs to whom

If you cannot prove that something belongs to you, the law assumes that it is communal and therefore must be shared. Therefore, keep good records of what belongs to whom. You can do this, for example, by including a list of your private property and debts in the deed of prenuptial agreement with the notary.

You can also make and sign a list together and/or keep receipts of purchases you have paid for with your private money and want to keep private. Note: the things you agree and keep together without a notary will not count as official evidence if you have creditors.

Divorce

In the event of a divorce, your partner can claim half the value of your business. Has your partner contributed to the growth of your business? For example, by working in the business or putting their own money into it. Then your partner can ask for additional compensation for this. Differences of opinion on this can be avoided with prenuptial agreements.

Prenuptial agreements

You do not have to marry in limited community of property. You can also marry on a prenuptial agreement. You and your partner can make these conditions completely tailor-made. You determine what is or is not communal, how you contribute to the costs of the common household and how you deal with savings or your own business, for example. For example, you can include in your prenuptial agreement that only your possessions or house are communal. Everything else will then remain private.

Notary

To draw up a prenuptial agreement, you have to go to a notary together. There you put down on paper agreements about your possessions and debts before, during and after your marriage. You indicate what is and is not joint and how you will divide everything if you ever get divorced or if one of you dies.

Reasonable compensation

Within a marriage, partners are required by law to both contribute (in Dutch) to the costs of the joint household.

If you are employed, what you earn during the marriage automatically falls into the limited community of property. In other words, you have to share it with your partner. Does your income come from a business you had before you got married? Then this income remains yours privately. What is private you do not share with your partner. As a business owner, you still do not contribute anything to the costs of the joint household. But you are obliged to do so by law.

That is why article 1:95a of the Dutch Civil Code (in Dutch) states that, as an entrepreneurial spouse, you must pay a 'reasonable compensation' (in Dutch) to the joint household. This way, as an entrepreneurial partner, you still make a contribution. Exactly how high this reasonable compensation is varies per situation.

If you start a business during your marriage, the reasonable compensation does not apply. Then your business is automatically joint. The assets and any debts of the business then belong to you and your partner together.

Advice

Whether you marry with or without a prenuptial agreement: discuss together with your partner what you want and expect from each other. If you have any questions, contact a legal advisor or notary.